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38 Cards in this Set
- Front
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Generally accepted accounting principles are primarilyformulated by: A. the Securities and Exchange Commission B. the American institute of Certified Public Accountants C. The FinancialAccounting Standards Board D. The Federal Reserve Board |
C The Financial Accounting Standards Board |
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Use the following selected information from ABCCorporation to determine the amount that will be reported on the balance sheetfor retained earnings: Beginning Retained Earnings $3,000,000 Beginning Common Stock $300,000 Ending Common Stock $430,000 Total Revenues $850,000 Total Expenses $1,120,000 Dividends $0 A. $3,540,000 B. $2,730,000 C. $2,860,000 D. $3,160,000 |
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Which of the following is a false statement regarding partnerships? A. Partnerships are limited to less than one hundred partners B. partners may be held personally liable for the partnership debts C. The accounting recordsfor the partnership should be maintained separately from the accounting recordsof the partners D. Partnerships may have as few as two partners |
C The accounting records for the partnership should be maintained separately from the accounting records of the partners |
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A credit decreases the balance of which types of accounts? A. expenses and assets B. liabilities and expenses C. assets and liabilities D. assets and stockholders’ equity |
A expenses and assets |
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Cashdividends paid to the stockholders will: A. increase assets and decrease liabilities B. decrease assets and increase liabilities C. have no effect onstockholders’ equity D. decrease assets and decrease stockholders’ equity |
C have no effect on stockholders’ equity |
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A business purchases a truck by signing a note payableto the seller. Such a transaction would include a: A. credit to truck B. debit to Note Payable C. credit to Note Payable D. debit to an expense account |
C credit to Note Payable |
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December31, 2011, salaries owed to employees total $2,350 and will be paid on January4, 2012. The adjusting entry prepared on December 31, 2011, includes a: A. debit to Salary Expensefor $2350 B. debit to Salary Payable for $2,350 C. credit to Cash for $2,350 D. credit to Salary Expense for $2,350 |
A debit to Salary Expense for $2350 |
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The closing entry for utilitiesexpense would include: A. a debit to Utilities Expense and a credit to Income Summary B. a debit to net income and a credit to Utilities Expense C. a debit to Utilities Expense and a credit to net income D. a debit to IncomeSummary and a credit to Utilities Expense |
D a debit to Income Summary and a credit to Utilities Expense |
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Where would “Sales Returns and Allowances” be includedon a multiple step income statement? A. As part of Net Sales B. As part of Other Revenues and Gains C. As part of Other Expenses and Losses D. As Operating Expenses |
A As part of Net Sales |
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Ifa company uses a perpetual inventory system, it will maintain all of thefollowing accounts except: A. Cost of Goods Sold B. Purchases C. Sales D. Inventory |
B Purchases |
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Giventhe following data, calculate the cost of ending inventory using the LIFOcosting method: Sales Revenue, Begin. Inventory, Purchases 1/1 Beginning Inventory 35 Units at $10 per unit 350 2/25 Purchase of Inventory 10 units at $12 per unit 120 5/20 Purchase of Inventory 5units at $13 per unit 65Purchase of Inventory 15 units at $13 per unit 195 8/15 Purchase of Inventory 30units at $14 per unit 420 10/17 Purchase of Inventory 25 units at $15 per unit 375 Total: 120 units 1525 COGS: 990 12/31 Ending Inventory 50 units 535 A. $500 B. $750 C. $725 D. $535 |
D $535 |
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FIFOtends to decrease taxes when: A. costs are constant B. costs are decreasing C. costs are increasing D. FIFO will always yield the lowest possible taxes |
B costs are decreasing |
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Eachof the following items affect the cash balance per books except: A. bank service charges B. notes collected by the bank C. NSF checks D. outstanding checks |
D outstanding checks |
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Which one of the following is not an objective of asystem of internal controls? A. Safeguard company assets B. Overstate liabilitiesin order to be conservative C. Enhance the accuracy and reliability of accounting records D. reduce the risk of errors |
B Overstate liabilities in order to be conservative |
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Whattype of account is the Allowance for Doubtful Accounts? A. Asset B. Contra-Asset C. Liability D. Contra Revenue |
B Contra-Asset |
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Acompany uses the percentage-of-receivables method of accounting for uncollectables.The yearend accounts receivable are $225,000 and 2% are estimateduncollectible. The Allowance for Doubtful Accounts prior to adjustment has adebit balance of $1,400. The amount of the adjusting entry is: A. $1,400 B. $3,100 C. $4,500 D. $5,900 |
D $5,900 |
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TheMitchell Global Company accepts a note in exchange for the sale of goods. Thejournal entry on Mitchell Global Company includes a: A. credit to Sales B. credit to Note Receivable C. debit to Accounts Receivable D. debit to Note Payable |
A credit to Sales |
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Acharacteristic of a plant asset is that it is: A. intangible B. used in the operationsof a business C. held for sale in the ordinary course of the business D. not currently used in the business but held for future use |
B used in the operations of a business |
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A company purchased land for $210,000 cash. Realestate brokers’ commission was $15,000 and $21,000 was spent for demolishing anold building on the land before construction of a new building could start.Under the cost principle, the cost of land would be recorded at: same numbers A. $231,000 B. $210,000 C. $225,000 D. $246,000 |
D $246,000 |
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The cost of a long-term asset is expensed A. when it is paid for B. as the asset benefitsthe company C. in the period in which it is acquired D. in the period in which it is disposed of |
B as the asset benefits the company |
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Thedeclining-balance method of depreciation produces a(n) A. decreasing depreciationexpense each period B. increasing depreciation expense each period C. declining percentage rate each period D. constant amount of depreciation expense each period (Straight-line) |
A decreasing depreciation expense each period |
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Equipmentcosting $40,000 with a salvage value of $8,000 and an estimated life of 8 yearshas been depreciated using the straight-line method for 2 years. Assuming arevised estimated total life of 6 years __ change in the salvage value, thedepreciated expense for the year should be: A. $6,000 B. $5,300 C. $8,000 D. $4,000 |
A $6,000 |
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Atruck costing $30,000 and on which $26,000 of accumulated depreciation has beenrecorded was discarded as having no value. The entry to record this event wouldinclude a A. gain of $4000 B. loss of $4000 C. credit to Accumulated Depreciation for $26,000 D. credit to Accumulated Depreciation for $30,000 |
B loss of $4000 |
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If a company incurslegal costs in successfully defending its patent, these costs are recorded bydebiting A. legal expense B. the Intangible Loss account C. the Patent Account D. a revenue expenditure account |
C the Patent Account |
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OnJuly 1, 2012 Linden Company purchased the copyright to Norman ComputerTutorials for $160,000. It is estimated that the copyright will ___ useful lifeof 5 years. The amount of Amortization Expense recognized for the year 2012would be A. $32,000 B. $15,000 C. $29,600 D. $16,000 |
D $16,000 |
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WestCounty Bank agrees to lend Drake Builders Company $100,000 on January 1. DrakeBuilders Company signs a $100,000, 6%, 6-month note. What is the adjustingentry required if Drake Builders Company prepares financial statements on March30? A. interest expense 3,000 interestpayable 3000 B. interest expense 3000 cash 3000 C. interest expense 1500 interestpayable 1500 D. interest payable 1500 interestexpense 1500 |
C interest expense 1500 interest payable 1500 |
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Theinterest charged on a $200,000 note payable, at the rate of 6% (assuming a 360day year), on a 60-day note would be A. $12,000 B. $6,000 C. $3,000 D. 2000 |
D $2000 |
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Keller Company issued a five-year interest-bearingnote payable for $100,000 on January 1, 2011. Each January the company isrequired to pay $20,000 on the note. How will this note be reported on theDecember 31, 2012 balance sheet? A. Long-term Debt, $100,000 B. Long-term Debt, $80,000 C. Long-term Debt,$60,000; Long-term Debt due within one year, $20,000 D. Long-term Debt of $80,000; Long-term Debt due within one year, $20,000 |
C Long-term Debt, $60,000; Long-term Debt due within one year, $20,000 |
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Thefollowing totals for the month of April were taken from the payroll register ofMetz CompanySalaries $20,000 FICA taxes withheld 1,533 Income taxes withheld 4,400 Medical insurance deductions 800 Federal unemployment taxes 160State unemployment taxes 1,000 The entry to record the payment of net payroll would include a A. debit to Salaries and Wages Payable for $12,107 B. debit to Salaries andWages Payable for $13,267 C. debit to Salaries and Wages Payable for $12, 267 D. credit to Cash for $12,267 |
B debit to Salaries and Wages Payable for $13,267 |
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A company receives $88, of which $8 is for sales tax.The journal entry to record the sale would include a A. debit to Sales Tax Expense for $8 B. credit to Sales TaxPayable for $8 C. debit to Sales for $88 D. debit to Cash for $80 |
B credit to Sales Tax Payable for $8 |
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Bonds that may be exchanged for common stock at theoption of the bondholders are called A. options B. stock bonds C. convertible bonds D. callable bonds- bonds that you can retire |
C convertible bonds |
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GomezCorporation issues 800, 10-year, 8%, $1,000 bonds dated January 1, 2012, at 96.The journal entry to record the issuance will show a A. debit to Cash of $800,000 B. credit to Discount on Bonds Payable for $32,000 C. credit to Bonds Payable for $768,000 D. debit to Cash for$768,000 |
D debit to Cash for $768,000 |
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__ of the corporateform of organization is A. professional management B. tax treatment C. ease of transfer of ownership D. its status as a separate legal entity |
B tax treatment |
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IfNorben Company issues 2,000 shares of $5 per value common stock for $140,000,the account A. Common Stock will be credited for $140,000 B. Pain-in Capital in Excess of Par Value will be credited for $10,000 C. Pain-in Capital inExcess of Par Value will be credited for $130,000 D. Cash will be debited for $130,000 |
C Pain-in Capital in Excess of Par Value will be credited for $130,000 |
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TreasuryStock is a(n) A. contra asset account B. retained earnings account C. asset account D. contra stockholders’equity account |
D contra stockholders’ equity account |
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Theboard of directors of Yancey Company declared a cash dividend of $1.50 pershare on 42,000 shares of common stock on July 15, 2012. The dividend is to bepaid on August 15, 2012, to stockholders of record on July 31, 2012. Thecorrect entry to be recorded on July 15, 2012, will include a A. debit to Dividends Payable B. debit to Cash Dividends C. credit to Cash D. credit to Cash Dividends |
B debit to Cash Dividends |
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The effect of a stock dividend is to A. decrease total assets and stockholders’ equity B. change the compositionof stockholders’ equity C. decrease total assets and total liabilities D. increase the book value per share of common stock |
B change the composition of stockholders’ equity |
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What is the total stockholders’ equity based on thefollowing account balances? Common Stock $400,000 Paid-in Capital in Excess of Par 50,000 Retained Earnings 175,000 Treasury Stock 25,000 A. $650,000 B. $625,000 C. $600,000 D. $450,000 |
C $600,000 |
